Trump's levies on Mexico, Canada, and China were the talk of the town this week
The first week of February was marked by volatility, as investors navigated a tumultuous political landscape alongside a flood of corporate earnings reports. President Donald Trump shook things up to start the week, announcing a 25% tariff on Mexico and Canada, along with a 10% levy on Chinese goods. Stocks whipsawed higher though, after the Trump administration ultimately paused tariffs on Mexico, in exchange for the country's cooperation with border security. The one constant all week was Big Tech firms stepping in and out of the earnings confessional, where mixed results influenced Wall Street's momentum.
Treasury yields and gold prices -- the latter nabbing multiple record highs throughout the week -- were also in focus, while investors unpacked key jobs data to cap things off. Overall, all three major indexes are set to close the week comfortably higher.
This Week's Biggest Earnings Reports
Arguably the biggest story out of the earnings block this week was Alphabet (GOOGL), which plummeted to its worst day since 2023 after reporting a fourth-quarter revenue miss. Conversely, Palantir Technologies (PLTR) stock surged to record highs following its own quarterly results. Semiconductor giant Advanced Micro Devices (AMD) faced a post-earnings meltdown, while PayPal (PYPL) struggled despite reporting strong financial figures.
Walt Disney (DIS) stock had a subdued post-earnings reaction, though options traders quickly moved in on the ticker. To close out the week, Amazon.com (AMZN) reported a fourth-quarter beat, but softer-than-expected guidance for the current quarter.
Tracking Trump's Tariffs
It's no surprise that tariffs played a major role in the broader market's price action, but Trump's aggressive tariff policies also had significant implications for individual stocks. Constellation Brands (STZ) stock took a hit as the 25% tariff on goods from Mexico weighed on the importer of Modelo and Corona beers. Apparel retailers Nike (NKE) and Lululemon Athletica (LULU) saw their shares decline. In a surprise move, multiple cryptocurrency-related stocks dropped as Bitcoin (BTC) faced uncertainty due to the prospect of strict tariffs.
All eyes were also on Meta Platforms (META), the owner of Facebook, as investors speculated on how the social media giant might benefit from a second Trump administration. Additionally, the emergence of "broligarchs" -- Big Tech billionaires supporting Trump -- sparked conversations about how they might gain from or influence the administration's policies.
Services, Manufacturing Data on Tap
Investors can expect more inflation data next week, as well as retails sales data and a host of speeches from Fed officials. Meanwhile, Airbnb (ABNB), CVS Health (CVS), McDonald's (MCD), and more are slated to step into the earnings confessional. Overall though, here's why traders need to be cautious moving forward.